When I was young and in my first proper job, one of the senior people described a new client that he was excited to be working with.
He explained the reason by saying: “they’re the sort of person for who money just sticks to their fingers”.
Being an inexperienced idiot, I didn’t know what he meant. Perhaps that person had jam on his hands and sticky fingers? Perhaps he worked in a glue factory?
Er, no. What my colleague meant by that was that the person (a successful entrepreneur / businessman) had a Money Blueprint that meant they couldn’t help but get rich(er). They had a set of beliefs, habits and skills that meant that, all things being equal, they would likely go on to accumulate more wealth. There are no guarantees in life but a helpful Money Blueprint is…well, helpful to getting money.
Maybe they were born and raised by parents who were good with money, knew all about the stockmarket / property development and passed that knowledge on to them? That’s a form of social capital and some people inherit more of this than others. Or maybe they were from a background of poverty and were hungry and self-taught?
I don’t know how that rich person thought because I never lived inside their head but I would bet that success in business and with money was somehow tied up with their identity: the way they saw themselves.
The way I think about identity is with the phrase: I am the sort of person who…
So in my case, the ways I see myself (in relation to money) would include:
- I am the sort of person who bends down to pick up 10p on the pavement
- I am the sort of person who gets things done
- I am the sort of person who doesn’t waste food
- I am the sort of person who adapts, improvises and overcomes
- I am the sort of person who turns the lights off when not needed
You may say I’m delusional
and you may be right but these are helpful beliefs. The point is not so much whether they are objectively true; the point is that I believe them, they form part of my identity and they help me function in the world. We all have to believe in something, so why not believe in something that helps you?
Note that in each case, the decision-making is quick and instinctive rather than slow and calculating. When I leave a room, I don’t calculate the cost of the electricity I am saving by turning out the light, I just do it anyway. This is more about values (e.g. environmentalism, financial security) rather than rational calculations. If you showed me that the financial cost of electricity was trivial over a lifetime, I’d still turn off the lights. It’s part of who I am.
The problem comes when people decide to change their financial outcomes without changing 1) their behaviours and 2) their identity.
Let’s say that Bill wants more money for retirement than he currently has: that’s an outcome that he wants to change. Can he just wave a magic wand or wish that better? Nope, remember The 2 Types Of Reality. Bill is going to have to change his behaviour to save more money.
But, as we all know, changing your behaviour to save more / lose weight / get fit etc etc can feel like an uphill struggle. Resisting the temptation to buy trinkets and trophies in a world of consumer temptation can be tricky.
It’s particularly hard if your identity conflicts with the desired behaviour.
So, if you see yourself as a successful person and you believe that successful people drive expensive cars…well, you’re gonna go ahead and buy that expensive car on lease finance…and to hell with the advice of The Escape Artist.
“You may want more money, but if your identity is someone who consumes rather than creates, then you’ll continue to be pulled toward spending rather than earning”James Clear, Atomic Habits
In other words, your money outcomes will never change if you don’t change your beliefs around money, your values and the way you see yourself (Identity).
Identity takes a long time to form and consolidate. It starts to form in childhood like soft clay and it starts to set in early adulthood. It solidifies into the deep recesses of our sub-conscious. In other words, its operating in the monkey sections of our brain…where most of the behaviour comes from. Sure, we can switch to manual override and overcome the monkey brain but it takes a hell of an effort.
The reason that behavioral change is HARD is that it involves changing (some aspects of) your identity and how you think of yourself. For example, imagine someone who thinks: “I am the sort of person who….wants to enjoy life”. Well it’s fine to want to enjoy life but that is not the same thing as needing to spend a lot of money on stuff. Spending does not equal happiness.
If you don’t change your thoughts and identity (Inner circle), you won’t change your processes (Middle circle ) and you won’t change your eventual outcomes (your net worth: Outer circle).
If you don’t program yourself, then someone else will. The advertising & marketing industries change the way we think, what we want and how we see ourselves. You may say those adverts just slide right off you but I wouldn’t be so sure about that. It’s like the rocks in a stream. Rocks seem stronger than water but, with enough time and enough water, all the rocks get worn down and their form is shaped and changed.
This is why most mainstream personal finance content is
useless ineffective. It goes straight onto processes (the nuts and bolts of saving and investing) without first dealing properly with identity, values and priorities.
The way to become a person who automatically gets richer is to change how you think about your identity and to embed that in your habits. No one said that this was going to be easy. If only we were like smartphones and there was a quick and easy way to “Restore Factory Settings”. We could go back to the being that non-materialistic kid that was happy playing in a sandpit for hours.
We didn’t get turned into consumers over night so it stands to reason that we won’t be able to reverse consumerism overnight. It takes time and reps. Sometimes people criticise financial independence blogs like this one for being repetitive, but that is a feature not a bug.
Talking of time and reps, I have now been blogging here on The Escape Artist for over 6 years. When I first started, my assumption was that someone would quickly point out where I was wrong and I would shut up.
Well it hasn’t turned out that way. As Elton John once said: I’m Still Standing. Not only is The Escape Artist blog still going but my new site The Escape Manual is now live. I’m building a detailed “how-to” manual for money and personal finance (with no jokes, no politics or philosophy and definitely no Now! music posts).
The 2 sites are complementary. The Escape Artist site deals with the “why” (values and identity) and The Escape Manual deals with “how” (the process stuff in the middle ring of the circle diagram above). The Escape Manual is subscription access (with no adverts, affiliate links or product placement) as I want to create a high quality community / coaching element and give my time to users & subscribers who value it. (And yes, I still enjoy getting paid even though the money is terrible compared to working in The Prison Camp).
The thought that I will leave you with is that willpower is over-rated. If you don’t change your beliefs (what you think), you won’t change your processes (what you do) and you won’t change your results (your net worth).
“If you keep doing what you’ve always done, you’ll keep getting what you’ve always got”Someone smart (perhaps Zig Ziglar?)
To this we might add: if you keep thinking what you’ve always thought, you’ll keep doing what you’ve always done.